China’s Mortgage Fiasco: To Bail Out or Not To Bail Out? — Houze Song

Summary:
On the face of it, the solution is obvious: bail out distressed developers because this is mainly a cash flow problem of not being able to pay construction firms to finish projects. Once construction restarts, the units get completed, buyers get their homes, and mortgage payments will start to flow again.But what is obvious is not simple politically. In fact, Beijing has been quite timid in stepping in because it is concerned about a massive moral hazard problem that would shift all the cost onto the central government.…The unanticipated cost of experimenting with capitalism that some hardline socialists warned about.Macro PoloChina’s Mortgage Fiasco: To Bail Out or Not To Bail Out?Houze Songhttps://macropolo.org/china-mortgage-fiascoFinancial cost is one thing. The human cost is another,

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